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NACS Board member congressional testimony: costs to small businesses of the transition to EMV credit and debit card technology are “staggering”

WASHINGTON, 2015-10-22 — /EPR Retail News/ — The costs to small businesses of the transition to EMV credit and debit card technology are “staggering”—averaging more than half of annual profits for convenience stores—yet the switch still represents a “missed opportunity” to further reduce fraud, according to congressional testimony by a NACS Board member.

Testifying before the U.S. House of Representatives Committee on Small Business, Jared Scheeler, managing director of The Hub Convenience Stores Inc., indicated that it has cost his chain of four North Dakota convenience stores $134,500 to date to install point-of-sale and pump card readers that accept EMV chip transactions. The average transition cost is more than $26,000 per store, compared with an average profit of $47,000 per year, bringing the total cost to roughly $3.9 billion for the 152,000-plus convenience stores nationwide.

“As a small business, the transition to EMV has been a costly and burdensome undertaking. It does not appear that the card companies took into consideration the realities of operating a small business when they came up with their transition plans,” asserted Scheeler. “In addition to the substantial time and money involved, the card companies have erected considerable obstacles that restrict my ability to reduce payment card fraud at my stores.”

In addition to the direct cost of replacing equipment, Scheeler cited lost management time; payments and lost income due to downtime from required software upgrades; as well the substantial but yet not fully known obstacles of getting equipment programmed and certified by the card companies. Each company requires separate certifications for credit, PIN debit and signature debit, which will be followed by pilot testing and “significant” staff training before EMV transactions can be accepted. Finally, ongoing maintenance and upgrade expenses are expected to exceed $2,200 per store annually.

Despite these upgrades, Scheeler testified, convenience stores will continue to bear “far more than 100% of the cost of fraud” due to “exorbitant” swipe fees, chargebacks and payments for data breaches. Moreover, the card companies failed to require chip-and-PIN technology, a “simple and very effective security measure” that they promote abroad and “would substantially reduce fraud losses for everyone, including small business owners.” PIN, according to the Federal Reserve, is six times more effective than signature in preventing fraud on debit transactions, a critical advantage to stores with gas pumps where merchants do not see customers.

“As a small business owner, paying for this costly EMV transition and substantial annual fraud costs, I am frustrated that I will not see the fraud relief that I and other retailers could easily get if the networks were making the type of genuine fraud-reduction effort that they have made around the world,” stated Scheeler.

Scheeler’s full testimony is available here.


Founded in 1961 as the National Association of Convenience Stores, NACS ( is the international association for convenience and fuel retailing. The U.S. convenience store industry, with more than 152,700 stores across the country, posted $696.1 billion in total sales in 2014, of which $482.6 billion were motor fuels sales. NACS has 2,100 retail and 1,600 supplier member companies, which do business in nearly 50 countries.

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